“We continue to believe that equity markets look attractive for 2025, with broader sector leadership and participation, thanks to improving fundamentals and a policy tailwind,” Cronk said in the report. “The incoming administration and congressional leaders want a fast start, with likely policy priorities including extending tax benefits, deregulation, tariffs, and tighter border control. We expect that these policies will support our guidance.”
WFII’s report projected the S&P 500 Index to close 2025 within a range of 6,500 to 6,700, with earnings emerging as the primary driver of equity prices. The financials, communication services, industrials, and energy sectors are expected to perform strongly, with small-cap equities also expected to gain.
In addition to robust GDP growth, WFII forecast inflation to average 3.3% in 2025. Meanwhile, Federal Reserve policies will likely maintain short-term rates between 4.00% and 4.25%, while long-term Treasury yields are projected to rise to between 4.50% and 5.25%.
Investment strategies recommended by WFII include preparing for liquidity, focusing on cyclical recovery, and exploring opportunities in artificial intelligence and US-centered investments.
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